Branching out, cashing in...
UK outsourcing is being boosted by investment banks as they expand into new business areas.
With some investment banks beginning to offer financial outsourcing services and others providing mortgage lending, Pierre Audoin Consultants (PAC) is predicting this will drive outsourcing growth.
Investment banks are starting to offer outsourced services to specialist financial services companies such as hedge funds.
In May 2006, for example, JP Morgan signed a $2bn contract to run hedge fund operations and administration for London company Henderson Global Investors.
silicon.com Financial Services
Get the latest financial services news straight to your inbox. Sign up for the FS newsletter today!
In addition, investment banks are entering the mortgage lending arena. They are turning to outsourcing as a cost-effective way of making the necessary changes to IT and business processes.
ING Direct recently moved into mortgage lending and worked with CapGemini to help integrate the new services into their infrastructure.
Outsourcing in banking made up 44 per cent of the software and IT services market in 2006, with a market value of £1.8bn. PAC forecasts this will grow annually at an average of nine per cent until 2010.
The findings are part of PAC's UK Banking Sector report, which examines how business developments affect the IT market.